Politics and Government

New wood products plant projected to bring 150 jobs to NE Minn.

A man speaks at a podium with flags behind him.
Gov. Tim Walz speaks during a press conference in March. Walz said Monday one of the first hurdles has been crossed for bringing some new jobs to Minnesota's Iron Range
Evan Frost | MPR News file

Updated: 6:45 p.m.

In a major boost to the state’s wood products industry, North Carolina-based Huber Engineered Woods (HEW) has announced plans to build a $440 million manufacturing facility in northeastern Minnesota. The plant is projected to bring more than 150 jobs to the region.

The Iron Range Resources and Rehabilitation Board (IRRRB) — made up of state legislators from across the seven-county northeastern Minnesota region — voted unanimously Monday to approve a $15 million forgivable loan to the company to help build the new plant in Cohasset, just a few miles west of Grand Rapids.

The project is contingent on an additional $20 million investment from a second state agency, the Department of Employment and Economic Development.

Huber Engineered Woods plans to break ground by next spring on the 750,000 square foot facility, which would be built on 400 acres owned by Minnesota Power, next to the utility’s Boswell Energy Center. Minnesota Power announced earlier this year it intends to close and convert Boswell’s remaining coal-fired units by 2035.

The manufacturing facility would produce oriented strand board — or, OSB — a type of compressed wood panel, similar to particleboard or plywood, used in housing construction.

Huber president Brian Carlson said the company considered a number of factors in searching for a site for its new facility, which he said will help the company meet growing demand fueled by the “pandemic-induced housing boom.”

The company ultimately decided on northern Minnesota because of its “fiber basket, long history in the OSB industry and the quality of the workforce.”

The Cohasset facility would be Huber’s sixth mill and its largest capital investment to date. Carlson said it will add 30 percent to the company’s manufacturing capacity and would primarily serve markets in the western United States.

The company also noted the new facility would be located less than 10 miles from the country’s first OSB plant, which was built in Grand Rapids in the 1970s.

Public financing a key factor

The public financing package is structured as a forgivable loan, which requires the company to maintain a minimum employment of 100 workers over its first six years, said Matt Sjoberg, executive director of business development at IRRRB. The jobs are projected to pay about $30 per hour.

“We hope that the loan, in essence, becomes a grant through the company meeting its benchmarks and earning the forgiveness,” Sjoberg said.

Huber projects the mill will also spur hundreds of indirect jobs, primarily in the region’s logging and trucking industries, which have been hit hard by recent closures of other facilities.

Carlson thinks that about 150 logging trucks will be needed to supply the facility with aspen that’s not already being harvested for other markets. He said ideally it would be cut from within a 70-mile radius of Cohasset.

The announcement is welcome news for Minnesota’s forest products industry, which suffered a major blow last year when the Verso paper mill was closed in Duluth.

The scale of the new plant is similar to one proposed by a different company five years ago, when the IRRRB approved $36 million in funding for a wood siding plant that the Louisana-Pacific Corporation had proposed — first for the town of Hoyt Lakes, and then for Cook.

But that project, also estimated to cost $440 million, has yet to be built after the company instead chose to invest in a facility it owned in Canada.

Gov. Tim Walz, a Democrat, expressed confidence Monday that this project will be different, saying it’s now part of budget negotiations at the state Legislature.

Legislation in motion would direct additional state dollars to support the project, including a bill that would tie that funding to the company’s investment and output.

"We'll get that thing through,” Walz said. “It will make a difference. From the timber industry, this is one of the first big things we've seen in decades around that, and I think that's a real positive."

Republican legislators from the Iron Range also celebrated the announcement.

“Huber is wisely making a significant investment in the best workforce in the nation — the hard-working men and women of the Iron Range,” said State Rep. Spencer Igo, R-Grand Rapids.

Just a year ago, forest products industry officials convened an emergency meeting in Grand Rapids to discuss the shutdown of the Verso mill, recalled Scott Dane, executive director of the Associated Contract Loggers & Truckers of Minnesota.

Now, Dane said, “a year later, we’re announcing the biggest development in the forest products industry in 40 years.”

The company still needs to acquire the property, which is currently owned by Minnesota Power. It also needs the approval of certain legislative initiatives and funding from additional state entities.

HEW is a subsidiary of J.M. Huber Corporation, one of the largest family-owned companies in the U.S. It would be HEW's sixth mill in the U.S. and first in Minnesota.